COME EXPERIENCE THE NIVEA FEELING!
One always feels that being a boss is the easiest job, so we give you the “easy” way out
PLAY THE BOSS, BUT WITH A RIDER ATTACHED – YOU HAVE TO PRESENT TO THE BIG BOSS
HERE ARE THE RULES OF THE GAME
• YOU ARE THE DIRECTOR, SCM OF NIVEA INDIA (NO LESS!)
• THE MD OF THE COMPANY HAS ASKED YOU TO MAKE A PRESENTATION ON THE SUPPLY CHAIN STRATEGY IN THE CHANGING BUSINESS ENVIRONMENT (READ, ORGANIZED TRADE, OMNI CHANNEL, E COM GROWTH IN INDIA)
• REMEMBER, THE MD IS A BUSY MAN SO HE WILL NOT READ A LENGTHY PROPOSAL
• THE SOLUTION SHOULD BE A COST EFFECTIVE, CRISP AND ACTIONABLE / IMPLEMENTABLE ROADMAP FOR THE FUTURE
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INSTRUCTIONS
Case presentations will be judged on thoroughness, originality and uniqueness of the idea, feasibility of implementation, Nivea India’s strengths and values, and economic logic used to defend practicability.
Teams need to submit the case solution in the form of a Power Point Presentation with not more than 8 slides and minimum 12-point font size. (including illustrations, title page, cover page).
There must be a cover page of the presentation comprising of an executive summary of the solution, limited to one slide only.
Participants are encouraged to use the format which best illustrates their solution.
Wherever necessary, the participants must refer to the sources of information and data.
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ABOUT NIVEA INDIA
NIVEA India Pvt Ltd is an affiliate of Beiersdorf AG. Throughout our history we have built trust by staying close to our consumers and developing innovative skin care brands that are tailored to their needs. We work as one global team, with one focus: making people feel good in their skin. Everywhere. Every day. As we head into the future, we want to become the number one skin care company in the world.
NIVEA is the world’s largest skin care brand which uses ingredients inspired by nature to work in harmony with skin, body and life to make you look and feel more beautiful.
NIVEA India Pvt Ltd was established in 2005. In the last 14 years, NIVEA has established a robust and effective distribution network, and built strong relationships with consumers and partners. In 2015, NIVEA established its first manufacturing location in India in Sanand, Gujarat.
In India, NIVEA is present across various categories like all purpose cream (Nivea crème, Nivea soft etc.), Body wash, deodorants etc.
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NIVEA INDIA PRODUCT PORTFOLIO
NIVEA IS PRESENT IN INDIA IN THE FOLLOWING CATEGORIES -
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BODY
Hand Care
Lotions
All Purpose Creams
FACE
Face Cleansing
Lip Care/Sun
MEN
Cleansing
Grooming
Personal Care
Male Deodorant
Female Deodarant/ Talc
Shower Gel/ Soap
SC ORGANIZATIONAL STRUCTURE INDIAVP Supply Chain, NE
SC Director
MD-Nivea India
Logistics & CS Head
SC Excellence Mgr.
RLM N&E
RLL North
RLM- West
RLM- S & C
RLE – Central
RLE- East
RLE – South
CS Mgr
CS officer
Procur. Lead
Purchasing Manager
3PM steering
3PM prodn Lead
Sr Quality & RA Mgr
Q& RA Manager
Planning Head
Demand PlngMgr
Demand PlngMgr
DP lead
supply planning mgr
Export/Madcon
Supply P Mgr.
Distribution Mgr
Distribution off
OT service Mgr
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OT team (off role and On
role)
BROAD FUNCTIONS WITHIN SUPPLY CHAIN
Planning Logistics & CS
IIM
ProcurementVAS
Indirect / Marketing/ Logistics
3PM Steering
Quality
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NIVEA INDIA VALUE CHAIN
BMH / BMB BMTCThailand PC BMM
* Value wise contribution
INDIA PC : 60%
3PM: 20%
IMPORTS : 20%
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NIVEA INDIA VALUE CHAIN : DOMESTIC BUSINESS
General Trade
400+ Points
Modern Trade
Cash & Carry
E-Commerce
CSD / CPC / Institution
150+ Points
100 Points
100 Points
100+ Points
INDIA PC : 60%
3PM : 20%
IMPORTS : 20%BDF Factory
Regional WH
Mother WH
Kolkata
Mumbai
Delhi
West
Bangalore
Central
Satellite WH
East
North
South
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NIVEA INDIA VALUE CHAIN
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WHAT GOES INTO ALL OF THIS ?
30No. Of direct
chain servicing
200 SPGRs 200 SPGRs 200 SPGRs
400 Vendors
650 + Artworks &
Registrations
200 SPGRs
▪PLANNING ▪LOGISTICS ▪VAS, PROCUREMENT
& REGULATORY
17000
Pallets/ Mth
200 SPGRs
1 Mln +
cartons / Mth
200 SPGRs
5500 +
Orders / Mth
200 SPGRs
4500
Deliveries / Mth
200 SPGRs
50K +
S&OP Fcst data
points
200 SPGRs
10K +
Distribution data
points
200 SPGRs
30 +
VAS promo /
Mth
200 SKUs
200 SPGRs 200 SPGRs
12 Mln VAS Pcs/ Annum
SUPPLY CHAIN OVERVIEW: LOGISTICS AND WAREHOUSINGNivea India has one production unit in Sanand, Gujarat and a mother hub in Mumbai. There are 3 regional hubs in North, South and East respectively and 16 distribution centers spread across the country. For Nivea India,
FTL share in primary transportation is almost 60% of the total volume.
The cost drivers include service levels back haul opportunities, supply demand dynamics, and seasonality. Primary contributors to transportation cost include line haul charges, cost of consumables, tolls & taxes, and costs related to EMI and maintenance of the vehicle.
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GST
Service Tax
Customs Duty
Excise exemption
Central Sales Tax
Entry Tax
Octroi
LBT
GS
T
SCALE WAREHOUSING
Fragmented W/h
Low Quality
Small time 3PL partners
Challenge in systems / IT
W/h Consolidation
High Quality W/h infrastructure
SCALE Players
Pre GST Post GST
COUNTRY LOGISTICS SCORE IMPROVING
*LPI – Logistics Performance Index
Source: World Bank Ranking - 2018
2014 LPI 51st
2018 LPI 44th
ROAD & SEA INFRASTRUCTURE
ROAD
SEA
Golden Quadrilateral
Connecting PORTs –SAGARMALA
Project
TECHNOLOGY IN SUPPLY CHAIN
PLAN MFG DEPOT DB / RETAIL PROCURE
Demand Planning Software
Supplier Relationship Management
(SRM)
+
Procurement & E-Auction Solutions
Production Planning & Detailed
Scheduling
+
Capacity Requirements
Planning (CRP) Solutions
Warehouse Automation
+
Warehouse Management System
(WMS) Solutions
Building Digital Connect with Customers
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RISE OF ORGANIZED TRADE AND CHANGING BUSINESS LANDSCAPE (OMNI CHANNELS & DIGITAL KIRANA)
Organized trade encompasses:
▪ Modern Trade (Dmart, Big Bazaar, Reliance Retail etc.)
▪ Cash & Carry (Metro Cash & Carry, Walmart India, Reliance Mart etc.)
▪ Ecommerce (Amazon, Bigbasket, Nykaa, Grofers etc.)
Organized trade has been steadily gaining pace in India and by leveraging technology and scale the distribution models are evolving
NIVEA has also seen the organized trade business grow rapidly in the last 3 years.
Given the trend, the target is to sustain 35%+ growth rate YOY in this channel.
Organized trade represents unique challenges in demand planning accuracy, distribution strategy, increased levels of inventory to sustain needs of the customers, ownership of bad goods and reverse logistics, product mix etc.
2017 2018 2019Contribution in Domestic Sales 40% 45% 50%
Growth 35% 40% 35%
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THE CHALLENGE & DELIVERABLESRecommend a comprehensive supply chain management strategy for Nivea, which will address the following:
- How to leverage the current presence in modern trade and ecommerce. It is recommended to draw information from external sources on the growth of Organized Trade, new trends and channel conflicts etc. in India
- Parallel drive efficiency and growth in current traditional trade stores while extending distribution into new stores (Use of technology and efficient ways to handle)
- Propose ways to continue driving our efficiencies in productivity while ensuring we retain an agile/highly customer centric organization and supply chain.
- Also propose digitization opportunities across value chain to drive customer centricity and capturing real demand
- The strategy should be well rounded, drawing upon various aspects of supply chain including but not limited to service level, demand planning, distribution strategy, technology for organized trade, impact on overall inventory levels, measures to ensure freshness of stock, logistics cost and terms etc.
-
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THE CHALLENGE & DELIVERABLESTHE STRATEGY PRESENTED SHOULD COVER BUT NOT TO BE RESTRICTED TO THE FOLLOWING –
DEMAND PLANNING / SENSING
The service levels asked for byOrganized Trade Customersare substantially higher thanthe service levels agreed uponfor Traditional Trade.
Suggest a strategy in thiscontext to increase ServiceLevel (if required) taking intoconsideration the following orany other ideas that you mayfeel important and actionable
• Differential Norms for MTSKUs
• Stock Reservation for MT
• Reconciliation withCustomer – Who (referorganogram)/Howoften/How/When
DISTRIBUTION STRATEGY FOR ORGANIZED TRADE
IMPACT ON INVENTORY LEVELS OF THE COMPANY
SERVICE LEVEL
Suggest ways and means ofimproving Demand PlanAccuracy for Organized Tradeby focusing on the following
Need and methodology forSeparate demand plan forOrganized Trade and itsintegration into the overallDemand Plan of the company
Event Planning for OrganizedTrade considering specialoffers are given to OrganizedTrade Customers
Need and way forward forCollaborative Planning withOrganized Trade Customers
What should be the distributionstrategy for Organized Trade -
Distribution Structure in viewof emerging Organized Trade
Should Organized Tradecustomers be given priority fordispatches
Is reserved stock for OrganizedTrade desired
Direct deliveries from factories
VAS (Value added services)where and when.
Strategy to counter increasedlevels of inventory to beprovided in line with the needsof Organized Trade asspecified above viz, CustomerService levels and DistributionPlanning
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THE CHALLENGE & DELIVERABLES
Rationale for policy(definition of FreshnessKPI to be used) on ageingof stock on shelf to bedecided. Basis the ageingstock policy there needsto be an action plan onBad Goods andownership of Bad Goodsand reverse logistics ofthe same if ownership iswith Nivea
Logistics strategy needsa relook considering theincreased variabledistribution cost withincreased number ofdelivery points.
Responsibility needs tobe assigned fordistribution from NiveaDC to Organized TradeCustomer warehouse andfrom warehouse to store
Given the Organizationstructure suggest anychanges (if required) tohandle organized TradeBusiness or suggestadditional responsibilitywherever required.
Give a brief outline ofNivea Wish list from allthe Organized TradeCustomers regardingproduct placement onshelf, total shelf space,warehousing practices,quality of transportation,Inputs for DemandPlanning, and any otherparameters that Niveashould be sure of giventhe product mix of Nivea.
LOGISTICS COSTS & TERMS
CHANGES IN ORGANIZATION STRUCTURE
NIVEA EXPECTATIONS FROM CUSTOMER
FRESHNESS
THE STRATEGY PRESENTED SHOULD COVER BUT NOT TO BE RESTRICTED TO THE FOLLOWING –
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THE CHALLENGE & DELIVERABLES
As an efficient Director SCM you need to ensure that supply chain provides a competitive edge tobusiness and any opportunity which presents itself should be leveraged towards the same. Give abrief write-up on Nivea business strategy viz., the growth of Organized Trade in India which shouldseek to answer the following
• How does Nivea leverage on the Organized Trade emergence with long term business strategy toensure sustainable growth in the future.
• How would Nivea make a strategy for Market Share gain, increased weighted distribution,improved merchandising opportunity etc that Organized Trade has to offer in long term?
• Integration of Nivea International Brands (presently not in India) with omni trade emergence
• Leveraging Nivea Strength in other markets which have high Organized Trade contribution
• Leveraging Digitization technologies to capture the real demand.
YOU ARE FREE TO ADD ANY MORE POINTS WHICH YOU FEEL ARE RELEVANT
BUSINESS STRATEGY
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